- Barnier suggests Brexit deal is possible by November
- Plastic payments are on the rise
- ONS figures show 0.6 per cent economic growth
Stat of the day
0.6 – the percentage by which GDP has increased by in the three months to July, according to the latest Office for National Statistics release.
Barnier suggests Brexit deal is possible by November
A Brexit deal could be signed off by mid-November if both sides are “realistic”, Michel Barnier has suggested (BBC News, online only) in what is now reported as a change of tone for the EU’s chief negotiator. Following his remarks, sterling increased by about one per cent against the US dollar, and half a per cent against the euro (Express, p4).
This month’s summit in Salzburg may prove to be one of the most significant EU 27 meetings since talks began and will include discussion as to whether to implement guidance from Barnier. While the EU was not about to compromise its Brexit principles, Kate Adler, BBC Online’s Europe Editor, said the EU were aware of Prime Minister Theresa May’s domestic political troubles and “planned to throw her as much of a lifeline as possible”.
Closer to home, Politico (£, online only) reports the Chancellor Phillip Hammond may confirm the date for this autumn’s budget in Westminster today.
Plastic payments are on the rise
More than three-quarters of the UK’s 20 billion retail transactions over the past year were made by credit or debit cards, BBC News (online only) reports, with cash accounting for just 22 per cent of purchases.
UK consumers increasingly now use cards, in particular paying via contactless payments, the British Retail Consortium told the BBC. The decline in cash has partly been driven by consumers now using their cards to make lower-value purchases.
The recent UK Finance UK Payments Report 2018 published in June this year revealed that an estimated 3.4 million people hardly used cash at all during the year, with consumers aged between 25 and 34 most likely to pay for goods using contactless options.
ONS figures show 0.6 per cent economic growth
The British economy has grown at the fastest quarterly pace since August 2017, figures from the Office for National Statistics (ONS) reveal today. Citing the hot weather and World Cup fever lifting household spending, the figures show that the economy expanded by 0.6 per cent in the quarter to July (The Times, £, online only).
Services also grew particularly strongly in this same quarter, and increased by £8.4 billion to £117.1 billion in the 12 months leading up to July 2018. Rob Kent-Smith, Head of GDP at ONS, commented on the figures that “…the construction sector also bounced back after a weak start to the year” (City AM, p3).
Latest from UK Finance
Victor Pinto, Banking solutions specialist at Moody’s Analytics, suggests it’s high time for lean regulation and risk compliance adoption to happen in the banking sector.
The snappily titled Business Contract Terms (Assignment of Receivables) Regulations has not been top of the political and news agenda – until now, blogs Matthew Davies, Director of Invoice Finance and Asset Based Lending. .
News in Brief
The EU’s GDPR regulation works, as was demonstrated last week when British Airways shared details of its breach within the required 72 hours (Financial Times, online only, £). Consumers should always follow Take Five guidance if contacted by banks or retailers asking for financial information, especially following instances, such as data breaches.
If City businesses use Brexit to reduce their tax bills, Philip Hammond may face a significant hole in his budget projections, The Times (p9, £) reports.
London has bucked the national trend of low productivity with output increases of 20 per cent, the latest ECI Growth Survey revealed (City AM, p 9).
The City of London Corporation has announced it will provide £2 million in funding over the next three years to fund the Green Finance Institute, which is due to launch next year (Politico online only, £).
What the commentators say
In the Evening Standard (p16), Stephen King, British economist, asks who the UK should “dance” with in a post-Brexit world when UK exporters have, typically, been reliant upon dealing with more traditional countries. He points out that we are “better at exporting services than goods” and Britain stands to “cash in” in new emerging markets, regardless of whether we are in the single market.
Writing in The Times (p45, £) Philip Aldrick speaks about the changing face of finance and ‘financial deepening’, in which those across socio-economic backgrounds gain greater access to capital and services, as a social good. In his article, he notes the positive contributions made to the economy, from the one million people employed, the trade surplus of three per cent and contributing a tenth of all tax revenues. He warns of the associated risks with financial innovations, noting synthetic collateralised debt obligations (CDOs) in particular as contributing to the crisis of 2008 and the perception that banks were extracting, rather than contributing to the economy. In closing he states that while the industry is a tremendous asset to the country and the exchequer, it should not be overstated, adding that in 2007 it constituted an even greater share of the economy, ‘… and we all know how that turned out.’
- Treasury Committee oral evidence session on the UK’s economic relationship with the European Union
- ONS UK monthly unemployment figures released for August
- Financial Conduct Authority’s Annual Public Meeting 2018
- John McDonnell to talk at TUC Congress 2018 on its 150th anniversary
For a full list of upcoming UK Finance statistics releases, please click here.